China's Top Industrial Park Capitalizes on Tech Innovation

  China's Top Industrial Park Capitalizes on Tech Innovation

Business Wire

TIANJIN, China -- January 11, 2013

The Tianjin Economic-Technological Development Area (TEDA) claimed the top
ranking among the country's scores of industrial parks for the fifteenth year
in a row. However, as China's oldest industrial development zone, TEDA did not
finish first again by mere chance.

"Championship is more than just being the best right now, it's about investing
to be the best tomorrow as well," TEDA Director He Shushan noted, adding that
ever since its creation in 1984, the park has never rested on its laurels.

"For example, TEDA has built itself into one of the most technologically
advanced pieces of real estate in the world, offering out-of-the-box solutions
and blueprints for the next generation of investors," Shushan said.

TEDA beat about 90 rivals to top the rankings, which were published in
December. Awarded the top mark in the all important indicator of economic
soundness, TEDA was also ranked first for all sub-indicators, including gross
productivity, total industrial value, fiscal income and actual use of foreign
direct investment. The rankings were based on five pillar categories: economic
soundness; mechanism innovation; tech innovation; social development; and
eco-environment. TEDA was also ranked first for mechanism innovation and
placed among the top 5 in the other three categories.

Since 2000 TEDA has officially made technology investment a priority.
Subsidies amounting to five percent of the zone's revenues have been
reinvested in tech infrastructure, a move that has produced over 2,500
patents.

Meantime, TEDA has offered grants worth millions of renminbi to incubate a
wide range of companies, including startups, growing companies and
developed-companies, respectively.

And all that investment will pay off. By 2015 TEDA expects the value of its
electronics information industry to reach about 250 billion renminbi.

TEDA's innovations on behalf of its tenants also extend to pioneering funding
options. Under a new pilot program TEDA supports and boosts new- and
high-technology companies to use their patents, trademarks, authorship rights
and other intellectual property as collateral to apply for what might be
elusive bank-funding. Occasionally TEDA offers matching grants as well.

One such beneficiary is Bonna-Agela Technologies Inc., a company that serves
chemists and biochemists in the fields of drug discovery, food analysis,
pharmaceutical testing, environmental analysis and chemical research. The
company received a loan of 10 million renminbi from the Dalian Bank in 2010
through a patent-as-collateral lending arrangement.

In the first 11 months of 2012 alone, TEDA's pilot funding program has
attracted hundreds of financial institutions as partners and 38 companies have
directly benefited from loans amounting to more than 293 million renminbi.

Binhai Cloud Computing Park, with 500,000-server capacity, is another flagship
incubator and accelerator behind the zone's tremendous initiatives to develop
the cloud computing sector.

"During China's 12th five-year-plan period, Binhai aims to invest five billion
renminbi into cloud computing services and infrastructure," said Zou Fang,
Deputy Director of the TEDA Investment Promotion Bureau. "These investments
include details like the 890,000-square-kilometer park's ample and redundant
fiber, reliable power to support the data centers and other mission critical
facility."

TEDA has also arranged for its could computing park partners to enjoy
negotiated discounted rates from China's telecom suppliers, a benefit that
allows even larger efficiencies of scale, she added.

The focus led innovative groups to call TEDA home, including a shining
portfolio of corporate, governmental and institutional tenants – such as
Tianjin International Joint Academy of Biotechnology and Medicine (TJAB), the
National Research Center of Nanotechnology and Engineering, as well as Binhai
Software and Service Outsourcing Alliance (BOSA).

Ranked the world's fastest supercomputer in 2010, TEDA's Tianhe-1A Computer
has developed a cloud computing platform that supports demands for 3D
animation, oil exploration, industrial machinery and pharmaceutical R&D,
simulative analytics, system forecasting, data mining and financial risk
modeling. Both Tianjin Meteorological Bureau and the National Offshore Oil
Corporation have started trials with the Tianhe-1A supercomputer, which,
according to a listing maintained by the University of Tennessee, was 40%
faster than the world's No.2 supercomputer.

TEDA offers such a robust and high-tech eco-system that IBM partnered with
TEDA in 2003 to set up its SaaS and laaS data service joint venture called
I@T. Under the partnership TEDA frequently organizes symposiums where its
corporate clients, including IBM cloud computing experts, can gather and
exchange notes. And as Tianjin evolves into one of northern China's financial
service centers, I@T will be perfectly positioned to service the banking
industry, which requires above-average data security and greater systems
customization.

The partnership is a win-win, said Liu Yang, the joint-venture's head of
marketing. "We were able to be actively engaged in planning the blueprint for
cloud computing for the zone," he said. "So it's really about two-way
communication and service offerings that cater to real-world demand."

I@T is not alone. TEDA is also home to Tencent's first-ever cloud computing
center. The group operates the wildly popular instant-messaging platform
called Tencent QQ, as well as one of the world's most active web portals,
QQ.com. Tencent holds 29 patents directly related to cloud computing, all of
which are in use in TEDA.

In addition, Hewlett-Packard has based its global cloud computing hub in TEDA,
while Standard Chartered Bank has set up one of its three hubs there, from
which it can service its global clients.

"TEDA will continue to engage in innovation to create a better investment
environment for its partners — one that will move upward along the value chain
and fulfill our promise of excellence," Shushan said.

The stakes could not be higher. Parks like TEDA will only become more
important as China continues on its path away from low-cost manufacturing to
an economy based on greater levels of automation and innovation.

"Many countries have been suffering from the 'middle-income trap' since World
War II," noted Justin Yifu Lin, former chief economist and senior vice
president of the World Bank. He was invited to deliver a world
economic-outlook report at Peking University in October.

"Industrial upgrading including technological innovation has been the key
factor helping emerging economies in Asia such as South Korea get around the
middle-income trap and keep sustained economic growth," he further elaborated.

And as the cost of inputs rise and gradually erode China's low-cost
competitive advantage in the global economy, the necessity of having
innovative industrial parks like TEDA will only grow, said Trish Saywell, a
former reporter covering China at Dow Jones' Far Eastern Economic Review and
Asian Wall Street Journal. "Tech-innovation and production-networked
incubators are primed for growth now in China," she noted. "This will give
China an advantage even if foreign capital migrates to lower cost centers."

Contact:

Z. H. STUDIO
Lan Shen, 86-21-52081696
lan.shen@zhstudio.net
 
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